Trafficmaster Share Discussion Threads

[ls lowry] 06/6/2010 12:44

Well if you dont like the deal push for an egm and boot out directors.

[restassured] 06/6/2010 11:01

The high end forecast is for 2010 pre tax £8.3 million EPS 5.37p implying a p/e of 8.75.


But wait,it gets worse 2011 pre tax £10.6 million EPS 6.86p implying a p/e of 6.85.

Trimble navigation has a p/e closer to the mid 20's.Trafficmaster is mostly a US based business and should therefore attract something closer to a US business rating.

Especially in light of the fact, it is being taken over by a US private equity firm that specialises in buying undervalued companies.

We have held through the worst recession since the great depression.Trafficmaster managed to keep growing revenues during this time.
Market penetration for fleet tracking is still extremely low and starting to become the norm for businesses.


Shareholders took all the risks with their capital and now we are being robbed,by selfish incompetent directors.



I can only hope arbitrage firm Gruss and co have also run the numbers and reckon there could be a higher bid.

Keep an eye on the volume and share price as that will give us a large clue.

What I am still unclear about, is who approached who?

[tom306] 06/6/2010 09:16

Surely that is the case in all businesses? TFC's business sector has continued to grow both sides of the Atlantic despite the recession. Many independent studies show that fleet managers, with effective scheduling, can increase the number of deliveries per day and also save cost. Fleet management systems are now generally accepted to do that. Why should fleet managers not continue to pay if they save more money by doing so? The systems are not expensive per unit somewhere around $50 per month. On the mileages they travel, repaying that is almost a no-brainer.
As a long term investor in TFC, you will have shared in the frustrations of up and down profits, missed market forecasts and the like. TFC has been much more stable in the last few years and profit growth has been steady but sure. That is why I think 47p is too low, it reflects past attitudes not current realities.

[ls lowry] 06/6/2010 08:44

I bought in years ago when I thought sat navs would be in every vehicle but Tom Toms cheap for sale put paid to TFCs rental model. At the time I thought the business model was flawed and at TFC then the founder dumped his shares.

I appreciate what you say on the other side of the business but its questionable how long customers want to pay for the other side the business. Thats why I say its risky.

[tom306] 06/6/2010 08:29

TFC has £24m of tax losses so they won't be paying main tax for some time. That means probably sub 10x 2010 earnings. That is too cheap for a company that is going to make £7.65m before tax, having reported growing profits over the last 3 years. I have to challenge also "the risks of the business model"! Yes there is growing competition at the consumer end of the market, particularly in navigation. But 87% of Trafficmaster's profits come from business services which is altogether a different market where the needs are greater and can't be delivered to anything like the same quality by mobile phone.

I would argue that there is an opportunity in the business model. PAYD insurance is being tested in the USA at the present time as is road pricing in the UK. Neither is making money for TFC and is not factored into the price. No one knows the future but if either happened then 47p would look very cheap.

[ls lowry] 05/6/2010 16:48

Dec 10 Turnover 67.75 pre tax 7.65 eps 4.98

Dec 11 Turnover 70 mill pre tax 9 mill eps 5.83

Taking into account forecasta the bidder is paying just over 10 times earnings when you consider the borrowings they are taking on and the risks of the business model I dont think its a bad offer. I sold at the 80 to 90p level years ago!

[tom306] 05/6/2010 16:25

rest
Do you have the current forecasts for revenue, PBT and PAT for 2010 and 11 by broker?

[tom306] 04/6/2010 21:16

As a marker to the Board, we should all vote against the re-election of directors at the AGM. Proxies can be sent in anytime. Enough PIs voting against their re-election may wake the independent directors up even if the PIs don't have enough shares. If the scheme of arrangement fails then the directors should go anyway since trust in their judgement will have evaporated. Messrs Coomber, Eales and Cartmell are up for re-election. We should also vote against the Remuneration Report.

[tratante] 04/6/2010 18:03

Another bidder doesn't have too long to get their act together. Hopefully someone was already preparing to enter the fray before the price was announced earlier this week.

[tom306] 04/6/2010 16:55

Orange
I don't think they are interested in the 0.25p margin, that will be eaten up by funding costs or lost income on other investments :-)

[restassured] 04/6/2010 16:43

Complete silence from Tony Eales after my email.

Nice of them to have the courtesy to reply to their shareholders.

[orange1] 04/6/2010 16:32

They are a hedge fund acting for their clients and investors.

Gruss specialises in risk arbitrage a.k.a. merger arbitrage:



They buy in at 46.75 and hope to sell at 47p or higher. The point though is that it is now no longer possible to buy in at below 47p, if any one is still buying at this stage it can only be that they are hoping for an offer higher than 47p.

[sdavis] 04/6/2010 16:29

Pressure is mounting!

[restassured] 04/6/2010 16:20

I can't find anything although they are US based.Could be acting on behalf of Trimble,Garmin,not sure

[tom306] 04/6/2010 16:18

Any thoughts on Gruss, they're a new name to me?

[orange1] 04/6/2010 15:46

Interesting ...

Gruss & Co., a privately owned merchant bank founded in 1940, "one of the oldest and most experienced participants in U.S. and European arbitrage" (read hedge fund) has purchased
3,372,394 shares since the takeover was announced, following which news 582 000 shares are immediately bid for on the order book at 47p.

[argylerich] 04/6/2010 14:26

This 'deal' is a complete sell out, the share price will achieve better than this by the natural progression of the company over the next year anyway.

[tom306] 04/6/2010 13:33

If Vector were buying in the market, they would be subject to the same disclosure rules as everybody else. One of the reasons bidders go for a scheme of arrangement is that they don't have to buy any shares beforehand and risk being left with them if a deal does not follow. If successful, the SoA is binding on all members who then must sell to the bidder. If unsuccessful, it is not binding on anyone. Therefore they get all shares or no shares. With their costs covered by TM it is a very low risk strategy.

[sailing john] 04/6/2010 13:12

Alternatively - they could be selling. I have known it happen before to keep a lid on the price.. and by a FTSE 100 company. Allegedly!

[orange1] 04/6/2010 12:24

Surely Vector are just buying up shares in the market at 47p or less.

[tratante] 04/6/2010 12:00

Agreed Estienne, make them sweat!

[estienne] 04/6/2010 11:13

It appears as if TFC are worried about share holders creating a fuss and are manipulating the price

[buenos aires] 04/6/2010 10:51

The STOCK MARKET is fixed ,its so obvious to any observer with an internet connection. Stick to FTSE100,divi producing cos ,buy stocks when low like last year's crash and hey presto ,as if by magic they go up again in a years time ,and if they dont inflation eventually makes stocks go up anyway. Plan 5 to 10 years ahead ....Hindsight..

The same happened at Cybit's ,"scheme of arrangement" , lucky for me the management were reasonably decent and politely showed the door.

These non FTSE100 co's are a law onto themselves. No share holders association will tell you that.!!